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The Treasury had looked into all the options for moving workers from Sellafield. It has told the Nuclear Decommissioning Authority that Albion Square represents the best value for money.

As many as 900 staff will move to work in Albion Square’s four-storey office accommodation at the Preston Street Lane end of Whitehaven.

At this stage it is believed Britain’s Energy Coast has around £3 million available to kick-start the development but project partners are confident of attracting a private sector developer both to put in a sizeable investment and take on a building lease.

“The Treasury confirmation that Albion Square will provide value for money is welcome and exciting,” said Copeland Council leader Elaine Woodburn. “Bringing 900 more people into Whitehaven town centre to work and shop is a massive boost towards injecting vitality into the town centre.”

Work is already underway leading to demolition of existing buildings so construction can start.

Albion Square is expected to be ready for use late in 2013.

The NDA’s next step apart from tying up a developer deal will be to appoint a project team to drive forward a development.

Britain’s Energy Coast chairman, ex-energy minister Brian Wilson, said: “This latest step forward is testament to the hard work and commitment towards a project which we and our partners have maintained throughout all the challenges presented.

“Albion Square will confirm that Whitehaven is very much open for business and can provide space to rival that found in Britain’s major city centres. Bringing hundreds of workers from the relative isolation of the Sellafield site into the heart of Whitehaven will create a real economic boost.”

Coun Woodburn stressed: “The Albion Square project is the one that will bring the biggest possible impact on the regeneration of Whitehaven with a significant number of workers coming into the town centre and no doubt using our shops and services.

“I’m delighted we now have confirmation that the project can move ahead.”

The NDA’s new chief executive, John Clarke, described it as “a significant step forward for both ourselves and Sellafield Ltd’s aspirations to maximise the broader economic benefits of relocating staff from Sellafield site.

“We can now really get to grips with driving forward a development which has a key role in enhancing Whitehaven town centre and the wider Britain’s Energy Coast programme.”